Noteworthy Developments

 Global equities, as represented by the MSCI ACWI Index, saw solid gains, rising 2.3% However, there were notable regional disparities. The US Federal Reserve delivered its first interest rate cut of the year, lowering rates by 50 basis points. 

Global Equities

 Global equities increased by 2.3%, led by a strong performance in US large-cap equities (S&P 500), which rose 2.1%. International developed markets (MSCI EAFE Index) grew more modestly at 0.9%, but were down -0.4% in local currency terms. Emerging market equities surged by 6.7%, with Chinese equities leading the charge, up an impressive 23.9% following significant government stimulus announcements. Globally, growth stocks (2.5%) slightly outperformed value stocks (2.1%). The best-performing sectors were consumer discretionary (7.4%) and communication services (5.3%), driven by explosive gains in major Chinese names like Alibaba and Tencent. On the flip side, the energy sector (-3.1%) and healthcare (-2.7%) lagged behind. 

Fixed Income

 The US-Aggregate Bond Index advanced 1.3%, largely due to sharp declines in interest rates. Yields fell by 15 to 30 basis points as US inflation and employment data came in weaker than anticipated. US Treasuries, which make up 65% of the index, were up 1.2%, while investment-grade corporate bonds, comprising roughly 25% of the index, gained 1.8%. High-yield bonds benefited from a combination of high coupon income and lower interest rates, rising 1.6%. Leveraged loans were up 0.7%, with high coupon income driving returns. 

Alternatives

 The HFRX Global Hedge Fund Index posted a 1.0% gain, with most strategies contributing positively. Convertible arbitrage and global macro/trend-following strategies led the way with a 1.8% gain, while merger-arbitrage strategies lagged, down -0.4%.

Manager Comments

Carrhae: 8.0%

Outperformed the MSCI ACWI Index (2.3%) driven by broad exposure to emerging markets (6.7%) and specific positions in Indian equities, Thai banks, and Korean memory manufacturers.

Eminence: 5.8%

Outperformed the MSCI World Index (1.8%) and Russell Mid Cap Index (2.2%) due to strong, idiosyncratic performance from positions that had underperformed in prior months.

Linden: 3.1%

Outperformed the HFRX Global Index (1.0%) due to a combination of narrowing credit spreads and strong performance from new convertible bond issuances on favorable terms.